Air India on way to Rs 5,000 crore loss

The National Aviation Company of India Ltd, which runs flag carrier Air India, is expected to register a loss of about Rs 5,000 crore (Rs 50 billion) during 2008-09 fiscal, Rajya Sabha was informed on Tuesday.

"As per provisional estimates, NACIL is expected to register a loss of approximately Rs 5,000 crore in 2008-09, largely due to high operating expenses, which have been compounded due to the present economic recession resulting in a drop in passengers," civil aviation minister Praful Patel said in a written reply to the Rajya Sabha.

The high oil prices prevailing last year and the servicing of the debt on account of aircraft acquisition programme also led to the losses, he said.

NACIL had submitted a proposal in October 2008 for equity infusion of Rs 1,231 crore (Rs 12.31 billion) and provision of soft loan of Rs 2,750 crore (Rs 27.5 billion), with an interest of approximately 5 per cent payable over 15 years, he said.

It has been advised to formulate a concrete proposal for equity infusion and provision of soft loan.

NACIL was formed after the merger of Air India and Indian.